How to save for that house down payment

Buying a house is equal parts exciting and nerve racking. Naturally, a lot of the angst comes from finding the perfect place initially, but the real heartburn of sorts arises from what happens after that sales agreement is set in stone. Between hand money down (also referred to as good faith payment), home inspection and enough paperwork to choke an elephant, the house buying process is hardly a seamless process, particularly when you’re on the fifth or six version of your bank statement that you need to scan and send in to your loan officer. But perhaps nothing is quite as worrisome as the down payment, the amount of money you have to bring to the closing, which depending on the loan can be as much as 20% of the total cost of the home or about 6% give or take if you’re doing a Federal Housing Authority (FHA) loan. Either way, saving money becomes paramount. And rather quickly, since most closings happen within 30 days of sales agreement. Of course, you probably want to start thinking about saving money for that down payment well before you start the process of looking. Budgeting becomes a huge part of not only figuring out if you can afford that mortgage payment but also what can be cut to start saving money in chunks. Some will say so long to a bulky cell phone plan or high cable bill versus being able to walk into the house buying process with more confidence. The real penny pinchers, which in this case is a good not bad thing, start thinking outside the money saving and financial box and will do anything from gathering loose change for years or start selling off things they don’t use, such as becoming an eBay store and starting to stock away that down payment money from selling anything from antiques to used clothing. As for the loose change, $2.00 in loose change daily equates to nearly $4,000 over the course of a five year period as it relates to having extra money for that down payment. The eBay idea also brings to light those determined individuals who take a part time talent, such as online shopping or selling, and turn it into a mini money making endeavor to start saving money where they may have least expected it. As would be home owners, we all want to own that house, build our equity and credit and have something we can call ours. Getting to that point starts with that first down payment, one that can be achieved if we keep budgeting and prudent spending at the forefront.